Beware of Water Wolves in Economist's Clothing

As we move from one mega issue to the next, the water wizards are lining up to tell you how to price water to penalize water wasters and gluttonous guzzlers.

Today I received a notice about a upcoming two-week event sponsored by the Economist debating water as commodity versus that of an inalienable human right.

From The Economist’s online debate on the subject:

It’ll be a two-week long, Oxford-style online debate on the topic of the global water crisis. As both an industrial input and a prerequisite of life, water has become extremely scarce for roughly a billion people who do not have a constant supply of clean and safe water.

The exact proposition is, “This house believes that water, as a scarce resource, should be priced according to its market value.” Some of the issues the debate will cover include: Would water supplies be better managed if it were treated as a commodity, and priced accordingly? Or is water a basic human right that governments should secure for their citizens?

Arguing for the proposition: Stephen J. Hoffmann, founder and president of WaterTech Capital, a merchant and investment banking firm that specializes in serving the myriad of companies that, in aggregate, comprise the water industry, and co-founder of the Palisades Water Indexes.

Arguing for the opposition: Dr. Vandana Shiva, author of Water Wars and founder of Navdanya, an Indian-based, non-governmental organization founded to protect nature and people’s rights to knowledge, biodiversity, water, and food.

Links to additional posts were also listed, authored primarily by David Zetland:

• Oil and Water: A Guest Post
• The Economics of Clean Water: A Guest Post
• Is Water Too Cheap?

After reading these posts I had grave concerns that Mr. Zetland's commodity approach to pricing water would play right into the hands of the investor-owned water companies that I wrote about in my post of September 5.

My response to my neighbor Huynh was as follows:

"When demand exceeds supply, water managers do not raise prices; instead, they ask customers to use less. When "voluntary" conservation fails (often), managers send water cops out to ticket those who water their lawns on the wrong day, impose mandatory rationing of 20 percent,...

( And,, Ta da,)

stop issuing building permits, etc"

This quote from one of his guest posts started me thinking David Zeitman may be a shill for the investor-owned water companies.

We'll have to monitor the "friendships" of the California Public Utilities Commission, which approves San Jose Water Company's rates.

San Jose Water Company has been posting 10- 20% profit on roughly $200 million in annual revenue. That seems pretty generous on a day that the 3 mos. T-Bills are yielding 0.43%.

This is a safe stock to own, with the guarantee that the State will always approve rates high enough to generate profit. But at what rate? Why does the CA PUC get to decide that?

I always approach this discussion with the credo that WATER IS LIFE. It's not an option like oil.
We can then begin the negotiations about how to price it.

The farmers in California are the most organized and always have managed to get it for cheap.
City folks don't need much, unless they're growing food. Then they should get irrigation water at the same rate as the commercial farmers.

Mr. Zeitman does not adequately cover the subject of the value of irrigation water needed for raising food and fiber. But then, farmers don't get water from investor-owned water utilities. They know how to make sure water is always their right and that it comes to them nearly as cheap as the rain from the clouds.

The Bridge That Never Was

This post IS NOT about one of the issues surrounding the Republican Party Vice Presidential candidate's "Bridge to Nowhere."

Instead, it's a story about how a bridge that never was played a role in determining a bit of our local history. As the City of San Jose grew larger even at the turn of the 20th century, local engineers planned to build an additional bridge over the Coyote Creek in San Jose but for some reason, the first design was never built. This bridge would have spanned the Coyote at the east end of San Salvador, near South 16th Street and connect to Williams Street's east-west alignment, south of and parallel to San Salvador . In 1911, the City of San Jose actually paid real money for the acquisition of a triangle of land on the creek center line to build a mid stream column to support the long bridge needed to span the fairly wide flood plain at this point in the river.

Either for economics or safety or both, this design option was abandoned, and a shorter bridge was constructed in its current location on E. William Street. The existing span is a shorter bridge and crosses the river at a skew. In order to have this shorter span, it was required that a embankment be created across much of the floodplain on which to build the western abutment, thereby restricting the flow of the river at flood stage. To mitigate this restriction of the floodway, the land that now is William Street Park was purchased as public open space but also to serve as a flood detention basin.

As subsequent storms proved the inadequacy of the storage volume in the upstream park, more riparian land was purchased upstream, giving us first Kelly Park and the connecting riparian lands in between, and then future purchases were added even further upstream, until urban and park planners realized that they were creating a park chain along one of the two main riparian corridors running through the watersheds draining the city of San Jose.

Today, the Coyote Creek Park Chain is one of San Jose's ecological and recreational assets with the potential to be one of its jewels. The trails along the creek are not yet contiguous from the bay to the base of Andersen Dam in Morgan Hill 30 miles south of the estuary. Our current Council member for District 3, San Liccardo, made one of the planks in his platform printed in his first ballot statement, continuing to connect the spot parks like Kelly, Williams, Roosevelt and Watson Park with creek-side trails.

Whether Sam considered the uproar that would arise from the 60 or so homeowners whose homes backed up to Coyote Creek downstream of the William Street bridge, I'm not sure. This idea had been pretty well vetted by the prior council member, Cindy Chavez during her tenure.

However, the Santa Clara Valley Water District has opened the door for achieving the extension of the creek side trails as part of the Mid-Coyote Creek flood protection project design that has been going on for about a year. The objective of this project is to prevent overflows of flood waters from entering their natural overflow channels to the east of the creek in order to protect the homes and businesses that the City of San Jose has allowed to be built in the bypass channels. The benefit of this project is obviously the prevention of flood damages from occurring, but also to relieve these bypass channel homeowners from the burden of paying annual flood insurance premiums to FEMA, whose regulations actually allowed these homes to be constructed in the floodable areas.

As downtown San Jose continues to densify the housing for its growing population, more demand will occur for contact with the natural environment that the riparian corridor of the Coyote Creek can offer. Despite the innovative approach Councilman Liccardo is proposing for bikeways on some of the one-way street around SJSU campus, continuous trails along the creek can provide off-road bicycle trails that are much more enjoyable and safer.

The Water District has so far ignored the fact that forcing the additional flows to stay within the main channel of the creek will constitute a inverse taking of the creek side properties downstream of the William Street bridge. Upstream diversion of some of the runoff from the Upper Silver Creek watershed has already augmented the flows through this reach of the river. Before the flood control project is implemented. the City and the District will have to address the inverse condemnation that results from the induced flooding of the Silver Creek and the newly proposed flood "protection" project.

Gold and Water in Them Thar Hills

A new video called Flow, about to be released should shake things up a bit.

It' s aimed at the bottled water companies, primarily.

But it also covers the World Bank deals which are forcing privatized water systems in urban areas, where there's lots of people to complain about the high costs and profits going to the corporations that own these water delivery systems.

In my last post, I told the story of the wealthy gold miner who owned the private water company that served water to the port city of San Francisco until 1930, when the City "municipalized" the private company and combined it with the new Hetch Hetchy water project and formed the SF Public Utilities Commission.

San Jose and much of Silicon Valley has gone in almost the opposite direction, although the public is still a strong partner with our local private water companies. In the local cities that have a municipal, rather than an investor-owned private water company, are those cities that wanted to contract for Hetch Hetchy water from the SFPUC. This arrangement was mandated by the Federal legislation, called the Raker Act, which authorized the construction of the dam in Yosemite National Park. Since San Francisco had long battled in court with the private Spring Valley Water Company, it was amenable to a requirement that none of the water or power from the Hetch Hetchy Project could be sold to any private company for resale. Municipal water and sometimes power companies were formed in the Peninsula and the South Bay cities of San Jose, Sunnyvale, Milpitas, Santa Clara, Palo Alto and Mountain View. In some cases like Mountain View and San Jose, investor-owned companies serve some if not most of the water to the residents and business in those cities.

According to their website, San Jose Water Company (SJW) was founded in 1866. SJW is an investor-owned public utility, and is one of the largest urban water system in the United States, serving over 1 million people in the greater San Jose metropolitan area. In the 1970's, the privately-owned Campbell Water Company was acquired by SJW, followed soon after by assuming the management of the municipally-owned Cupertino Water system. Most recently, San Jose Water Corp. has acquired the Canyon Lake Water Service Company in the state of Texas.

Recently, Rich Roth, the President of San Jose Water gave an address to the San Jose Rotary Club which naturally praised the benefits of investor-owned water system ownership, while pointing to many of the problems in the water supply situation we are facing in the coming years. Most of those problems are the result of the very conservative approach the leaders of this valley adopted for the last five decades, opting to obtain half our current water supplies from the State and Federal aqueduct systems, which draws all of its supplies through the Sacramento-San Joaquin River Delta. Now that the Delta is in ecological collapse and threatened to be destroyed completely by sea level rise from global warming, all that supply is at risk and the $30 million per year mortgage payments for the construction costs of the two aqueducts are still due and payable by the Santa Clara Valley Water District.

But scarier than losing the Delta supply, which is water of marginal quality, is the ever-present threat that San Jose Water Company could be sold to an even larger conglomerate and business decisions could move out of their local Board Room to anywhere on the planet. This threat became very real just a few years ago when American Water Company made a buyout offer for SJW. While the deal was not closed, American Water Company now has three directors from the German company RWE AG, which now owns controllingr interest in American Water Company. These directors are the Chief Financial Officer, Chief Counsel and the head of their mergers and acquisitions unit of RWE AG.

A recent article in the Christian Science Monitor poses the Question: Is Water Becoming the New Oil?
Of course, almost everyone agrees, people can learn to live without oil, but not without water. If water is managed strictly as a profit center for investor-owned corporations, many fear that water will not be considered part of the inalienable rights to life, liberty and the pursuit of happiness.

For a entertaining scenario of life with very little water, I recommend the hilarious musical stage play Urinetown.